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Labor Relations Update

Stuck With It: Labor Board Forces Employers to Recognize Bargaining Units that Contain Employees of Two or More Separate Employers

Posted in Bargaining units, NLRB

Returning to a decision it made 16 years ago (but was overturned just 4 years after that), the National Labor Relations Board has once again ruled that it will certify a bargaining unit containing individuals from two or more separate employers without those employers’ consent. In Miller & Anderson, Inc., Case 05–RC–079249 (July 11, 2016), the Board returns to the standard that it created in 2000, in M. B. Sturgis, Inc., 331 NLRB 1298 (2000) (“Sturgis”) and then quickly overturned in Oakwood Care Center, 343 NLRB 659 (2004).

Except for the four years when Sturgis applied, the Board has consistently held that both employers must consent for the creation of bargaining units that combine employees of the two organizations.  This issue most commonly arises in joint employer situations, where a union seeks to represent  a group of similarly situated employees, but some of the employees are solely employed by a single employer and others are deemed to be jointly employed by two employers.    For example, a union could seek a bargaining unit comprised of both regular employees of a company and individuals engaged through a staffing agency.  This may also arise where a company subcontracts out certain services but may have employees on staff who share a community of interest with the individuals employed by the subcontractor.

In its decision, the Board gave two primary reasons for returning to Sturgis.  First, the Board concluded that a unit of both joint and single employed employees “logically falls within the ambit of a 9(b) employer unit” given the breadth of the statutory definition of the terms “employer” and “employee” and the Board’s statutory obligation to “to assure to employees the fullest freedom in exercising the rights guaranteed by th[e] Act[.]” Second, it found that the Sturgis rule does more to effectuate the fundamental policies of the Act. Among other things, the Board noted that the Sturgis rule is “manifestly more responsive . . . to assure to employees the fullest freedom in exercising the rights guaranteed by the Act.” The Sturgis rule, it reasoned, allows employees to best exercise their right to self-organization because it does not require them to obtain employer permission before organizing in their desired unit.

Member Miscimarra penned a passionate dissent. After renewing his objection to the Board’s recent expansion of the joint-employer doctrine in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015) (“BFI”) generally, he outlined several concerns with the majority opinion. He posited that Sturgis units will result in confusion and instability, pose significant administrability problems, and runs contrary to the Act’s requirements and sound policy considerations. He was especially concerned that a return to Sturgis would result in employers being forced to engage in multi-employer bargaining without their consent and without taking into account any potential conflicts of interest. Additionally, he was disturbed by the fact that the Board, under Sturgis, could force employers to bargain with individuals with whom they have no real employment relationship.

The majority decision attempted to address some of the dissent’s concerns, suggesting that Sturgis units are different than traditional multi-employer bargaining units because in multi-employer bargaining units there is “no common user employer,” so conflicts of interest, and other concerns, should not be significant.

The decision is the Board’s logical, yet troubling, progression after the Board’s holding last year in BFI which broadened the standard for assessing joint-employer status under the National Labor Relations Act.  Between BFI and Miller, all companies that supply or purchase services from another entity with absolutely no expectation of creating any potential bargaining relationships, could easily be subjected to unexpected long-term obligations with unions and their business partners – a factor that should be taken into consideration in entering into, renewing, or continuing any such relationships.

NLRB Majority, Management Rights Clause Must Be Specific To Enable Employer To Make Unilateral Changes

Posted in Collective Bargaining, Duty to furnish information, Duty to provide information, NLRA, NLRB, Section 8(a)(5), Unfair Labor Practices

Collective bargaining agreements, do not, and cannot cover every issue that will arise during their term.  Matters concerning terms and conditions of employment that are not addressed in the labor contract have to be negotiated before changes can be made.  Sometimes, however, the parties agree that management can make changes to certain terms and conditions of employment unilaterally during the term of the agreement through a management-rights clause.   In such cases, the union waives the right to bargain over certain issues.  The presence of a management-rights clause, particularly one that is detailed, is a function of leverage in bargaining, and of the history between the parties.  Management-rights clauses serve an important role in labor relations as they set forth the issues the parties have agreed to leave to management’s discretion.  Or, at least that used to be the case.

In a recent decision, the NLRB appears to have heightened the standard for evaluating whether a union has waived the right to bargain over certain terms and conditions of employment in a management rights clause by requiring a new level of specificity in the contractual language before an employer can make unilateral changes.  In Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), a three member majority, with one member dissenting (the NLRB currently has only four members), decided that an employer violated the Act by not giving the union an adequate opportunity to bargain before it changed its existing policies.

The facts are similar to those that play out frequently in labor relations.  The employer and union were parties to a collective bargaining agreement containing a broad management rights clause which, among other things, provided that the employer”[R]etains the sole and exclusive rights to manage; to direct its employees; to evaluate performance, . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees. . . .”

The employer decided to make changes to the existing work rules, absenteeism policy and progressive discipline policy, and before doing so informed the union.  The union requested a meeting and also requested information related to the changes.  The employer agreed to a meeting at which it informed the union in writing that the employer had no obligation to bargain over the revised rules, referencing the language concerning the employer’s “sole and exclusive” right to “adopt and enforce” rules and regulations and policies.  The employer’s letter also stated that because it had no obligation to bargain over the changes it had no duty to provide the information requested by the union.  During the meeting the union officials expressed concerns about the policy changes, a few of which resulted in the employer making revisions.  There were no further meetings between the parties prior to the employer’s implementation of the changed policies.  Although the union filed a grievance over the matter, it ultimately withdrew it and filed charges with the NLRB.

An Administrative Law Judge found the employer violated the law by its implementation of the policies.  The Administrative Law Judge dismissed the allegation regarding refusal to provide information because the complaint alleged only that the employer refused to provide information and the employer claimed it did not possess responsive information.

On appeal, the NLRB affirmed the violation of the duty to bargain over the changes and also found a violation with respect to the employer’s delay in providing a response to the information request.

Board Majority Ruling On Management Rights

In finding a failure to bargain over the rule changes, the Board reviewed the law concerning waiver.  The Board noted the longstanding “clear and unmistakable waiver” standard applied, under which the parties must “unequivocally and specifically express their mutual intention to permit unilateral action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would otherwise apply.” (quoting its prior decision in Provena St. Joseph Medical Center, 350 NLRB 808, 811 (2011)).  The Board also noted that its precedent required the matter “at issue to have been fully discussed and consciously explored during negotiations and the union to have consciously yielded or clearly and unmistakably waived its interest in the matter.”  Johnson-Bateman Co., 295 NLRB 180, 185 (1989).

Applying these principles, the Board found a violation because “none of the contractual management rights provisions specifically reference work rules, absenteeism, or progressive discipline.”  The Board also noted that the employer’s letter to the union “made no mention of this [the management rights] provision.”  The Board distinguished the language before it with language it previously found constituted a waiver of bargaining in United Technologies Corp., 287 NLRB 198, 198 (1987) enf’d 884 F.2d 1569 (2d Cir. 1989).  In United Technologies, the employer unilaterally changed its progressive discipline policy.  In finding no violation of the Act, the Board found the following language of the management rights clause was specific enough to privilege the employer to make the changes to the discipline system, where management had “the sole right and responsibility to direct the operations of the company and in this connection….to select, hire, and demote employees, including their right to make and apply rules and regulations for production, discipline and safety…”  In contrast, the Board in Graymont found the language at issue was deficient because it did not specify “discipline” or “absentee” provisions in connection with its right to adopt and enforce rules.

NLRB Member Miscimarra dissented, writing that he would find no violation, and that the majority had unnecessarily parsed the language:

Management-rights language may be general and, at the same time, clear and unmistakable.  Here, the parties agreed that Graymont reserved the right, without exception, ‘to adopt and enforce rules and regulations and policies and procedure.’ No reasonable person reading this language could conclude that Graymont’s right of unilateral action extended to rules, regulations policies and procedures concerning some matters but not others.

 

Timeliness of a Response to Information Request Can Constitute Violation Even If Not Alleged In Complaint

The Board also found the employer violated the Act by failing to timely respond to the information request, even though it apparently had no relevant information to provide, and even though the delay in responding to the request was not an allegation in the complaint.  In Graymont, the employer informed the union (and the NLRB) in its answer to the complaint that it did not possess any information.  Graymont asserted because the complaint did not allege that the Act was violated by the delay in providing information or a response there could be no violation.  In finding no violation the Administrative Law Judge relied Raley’s Supermarkets and Drug Centers, 349 NLRB 26 (2007), where an allegation of delay in responding to an information request was dismissed because the complaint contained no such allegation. The Board concluded that Raley’s was “wrongly decided” and specifically reversed its holding.  The Board concluded that the allegations of delay and refusal to provide information are so closely related that the employer was put on notice that such a violation could be found even if it was not pled in the complaint.

* * * *

This decision demonstrates the difficulty, and uncertainty, faced by employers in asserting rights, especially in an absolutist fashion.  Undoubtedly the employer believed it was asserting a right it had secured in bargaining, something for which it perhaps had made concessions.  The employer even referenced the exact language upon which it was relying, only to be criticized by the Board for not specifically citing the provision.  Under the Board’s formulation, because in the management-rights language there was no topic identified specifically tied to allowing the employer to “adopt and enforce rules and regulations and policies and procedures,” such language effectively was rendered meaningless.

The fact the union did not pursue arbitration is interesting, too; the union consciously decided to remove the dispute from the agreed upon grievance process.   Finally, it is arguable that the parties did in fact bargain over the issue because the employer met with the union and made revisions to the rule changes based on the union’s concerns before implementing the new rules.

As to the information request issue, the current NLRB has taken the position that all requests for information need to be responded to in a timely fashion, even if the request does not seek information the employer is required to provide.

It seems clear that management-rights language will have to be more specific to withstand the scrutiny of the NLRB.  When in doubt, employers should meet with the union to fully discuss matters before making changes.  Employers also should always timely respond to all information requests even if there is nothing to provide or if the request seeks information the employer believes it is not obligated to furnish to the union.

In for the Long Haul as the Fifth Circuit Upholds NLRB’s “Quickie” Election Rule

Posted in NLRA, NLRB

Last April, the National Labor Relations Board (“Board”) implemented it’s new expedited union representation procedures. On June 10, 2016, in Associated Builders and Contrs. Of Tex v. NLRB, 15-cv-50487  2016 U.S. App. LEXIS 10552 (5th Cir. June 10, 2016) the Fifth Circuit upheld the new procedures, commonly called “quickie” election rules – – rejecting the Associated Builders and Contractors of Texas’ (“ABC”)) arguments that the rule exceeded the Board’s authority under the National Labor Relations Act (“NLRA”) and that it violated the Administrative Procedures Act (“APA”).

Specifically, ABC alleged that the rule exceeded the Board’s authority under Section 9 of the NLRA by allowing regional directors to preclude employers from contesting voter eligibility issues. The Court, however, found that ABC did not identify any statutory language or legislative history requiring litigation of all voter eligibility issues at the pre-election hearing. The Fifth Circuit agreed with the Board’s position that Inland Empire District Council, Lumber & Sawmill Workers Union v. Millis, 325 U.S. 697, 706 (1945) granted the Board wide discretion to devise the procedures to determine whether a representation question exists and rejected ABC’s argument that Inland was inapplicable because it was decided prior to the Taft-Hartley amendments.

ABC also challenged the rule on grounds thathe the rule’s provisions requiring disclosure of personal employee information both before and after the pre-election hearing conflicted with federal privacy law and that the requirements were ‘arbitrary and capricious’ under the APA. The court rejected the first argument on grounds that ABC failed to identify any federal law restricting disclosure of employee information to unions by employers. With regards to the second argument, the court found that the Board had properly considered privacy concerns, advancement in communication technology and the potential for union abuse in formulating rule. As a result, the court held that the Board’s rule was not ‘arbitrary and capricious’.

The Court also rejected ABC’s claims that the new rule would violate the free speech provision of the NLRA. Rather, the court held that the discretion afforded regional directors in setting election dates, provided sufficient protection for employers and employees to engage in meaningful speech.

Given the Court’s decision, employer’s must continue to be prepared for operating under the “quickie” rules in the event of an organizing drive. If you have any questions regarding the rules or further impacts of the 5th Circuit’s decision, we are always available to assist you.

Board Reverses 32-Year-Old Rule Allowing Employers to Oust Mixed-Guard Unions

Posted in Bargaining units, NLRA, NLRB, Section 9(b)

For thirty-two years, it has been a settled proposition that an employer may, upon the expiration of a contract, refuse to continue to negotiate with a “mixed-guard” union that represents its security guards. Continuing its long path of upsetting established precedent, on June 9, 2016, the National Labor Relations Board (“NLRB” or “Board”) reversed this and made clear that going forward a voluntary recognition of such a mixed-guard unit will require continued recognition just like any other bargaining unit. Loomis Armored US, Inc., 364 N.L.R.B. No. 23 (June 9, 2016).

A “mixed-guard union” is a labor organization that represents both security guards and other nonguard employees. Section 9(b)(3) of the National Labor Relations Act (“NLRA” or the “Act”) expressly prohibits the Board from certifying mixed-guard unions as the collective bargaining representative for security guards.  However, the Board has long held that an employer may voluntarily recognize a mixed-guard union as the representative of its employees.

In 1984, in Wells Fargo, the Board held that if an employer voluntarily recognizes a mixed-guard union, it may later withdraw recognition from the union for any reason as long as there was no contract in effect. Wells Fargo Corp., 270 N.L.R.B. 787 (1984).  The Board’s holding was based in part on the legislative intent behind Congress enacting Section 9(b)(3) of the Act, which was aimed “to shield employers of guards from the potential conflict of loyalties arising from the guard union’s representation of nonguard employees or its affiliation with other unions who represent nonguard employees.”

In Loomis, the Board completely overruled Wells Fargo.  The Board held that once an employer voluntarily recognizes a mixed-guard union, it may only withdraw recognition if the union loses majority support among the employees.  This rule applies to all other bargaining units, and the Board reasoned that the same rule should apply to guards as well – – placing an emphasis on the importance of preserving “stability in collective bargaining,” a tenet of the NLRA.

The Board dismissed the presence of any inconsistencies between its holding and the “conflict of loyalties” that concerned Congress when enacting Section 9(b)(3). The Board explained that employers recognizing mixed-guard unions will trade their ability to remove the union with whatever advantage recognizing the union brings the employer:  “An employer of guards thus may conclude that the potential conflict that concerned Congress either is not present or is outweighed by the potential advantages of entering into a collective-bargaining relationship with a mixed-guard union. And, in fact, a significant number of employers have availed themselves of this option.”  (Of course, those employers voluntarily recognized when they knew they could withdraw that recognition without challenge in the future.)

Importantly, though, the Board refused to apply its holding retroactively. Therefore, the Board’s rule from Wells Fargo will apply to all past and current cases, and the new Loomis holding will only apply to future cases.

Board Member Miscimarra dissented from the majority, arguing that the Board’s holding in Wells Fargo is more in line with the Congressional intent behind Section 9(b)(3) of the Act.  He stated  that “[i]f Congress deemed it objectionable to have guards represented by ‘certified’ mixed guard/nonguard unions, such an arrangement would appear equally objectionable when provided by a mixed guard/nonguard union that received voluntary recognition.”  Thus, Member Miscimarra found that it would be most consistent with Congressional intent to never allow mixed-guard unions to represent guards.  Still, he acknowledged some countervailing reasons for permitting voluntary recognition of mixed-guard unions, such as the need for unions to expand their membership.  Ultimately though, Member Miscimarra held that the Board in Wells Fargo applied Section 9(b)(3) in the “most appropriate manner.”  He further concluded that after thirty-two years of the Wells Fargo rule, the Board lacked compelling reasons to reverse the rule.

This case is very important for companies that employ security guards. Employers that currently recognize a mixed-guard unit/union must understand their continuing obligation to recognize the union, even after contract expiration – – a change which may materially impact bargaining leverage in future negotiations.  Moreover, employers with non-union security guards should also be cognizant of the shift in the law, which may limit the likelihood of future voluntary recognitions.  If a mixed-guard union seeks voluntary recognition, the employer should be aware that agreeing to that request will now bind the employer unless and until the union loses majority support.

The Right to Withdraw Recognition is Under Attack

Posted in NLRB

For over 65 years, an employer has had a legal right to withdraw recognition from an incumbent union based on the union’s lack of majority status. In 1951, in Celanese, the NLRB permitted withdrawal based on the employer’s “good faith belief” for the lack of majority status. In 2001, in Levitz Furniture, the standard was changed to require “objective evidence” to exercise the right to withdraw.

Often overlooked by the holding in Levitz Furniture was the fact that the then General Counsel sought to eliminate the right to withdraw recognition unless there was an RM or RD election to determine majority status. That dramatic change in the long-standing precedent was rejected by the NLRB in Levitz Furniture.

On May 9, 2016, the ghost of the former General Counsel’s position in Levitz Furniture was resurrected. Richard Griffin, the current General Counsel has instructed the NLRB’s Regional Directors to issue a complaint in situations where a withdrawal of recognition is not based on an NLRB election.

Thus, going forward, an employer that withdraws recognition acts at its peril until the validity of sixty-five years of precedent is resolved in the courts. Those employers willing to insist on their Celanese/Levitz Furniture rights may, however, find solace in the fact that the charge in Levitz Furniture was filed in 1994 and the NLRB’s decision took over six years (during which the NLRB sought briefs from non-parties on the then General Counsel’s “election only” position). If it takes that long this time around, who knows who the General Counsel will be under the next administration?

NLRB Requests Amicus Briefs in Two Significant Cases

Posted in NLRB

On Friday, February 19, 2016, the National Labor Relations Board invited interested individuals and organizations to file amicus briefs on two important legal issues where the Board is considering overturning existing precedent.

In one case, King Soopers, Inc., NLRB, No. 27-CA-129598 (2/19/16), the NLRB’s General Counsel has asked the Board to change its long-standing practice of awarding discriminatees with expenses incurred when seeking new employment only when the discriminatee received interim earnings.  Currently, the NLRB only awards reasonable search-for-work and interim employment expenses when the discriminatee receives interim earnings.  However, the General Counsel is now seeking to expand the types of cases where discriminatees can be awarded such expenses to cover situations where discriminates do not receive any interim earnings.  In other words, the General Counsel wants to re-write the law so that if a terminated employee searches for new work and incurs costs in the process, but does not find new work, the employer should still be liable for those expenses.  The deadline to file an amicus brief with the Board is March 18, 2016.

In the second case, U.S. Postal Serv., NLRB, No. 7-CA-142926 (2/19/16), the NLRB is seeking amicus briefs concerning whether the Board should allow administrative law judges (ALJs) to issue “consent orders,” subject to review by the Board, settling unfair labor practice cases where no party other than the Respondent has agreed to the terms of the settlement, and over the objection of the General Counsel.  Current Board practice permits ALJs to bless settlements without approval of the General Counsel or other parties.  The General Counsel is asking the Board to reverse precedent by not permitting ALJs to settle cases over the objection of the General Counsel, even if the ALJ believes that the Respondent’s settlement offer better effectuates the purposes of the NLRA than continuing to litigate the case.  Similarly, the due date to file briefs with the Board on this issue is March 18, 2016.

NLRB Issues Union Friendly Decision Regarding Applicability of Quickie Rules: When 94% Just Ain’t Enough

Posted in NLRB

With that the NLRB’s quickie election rules going into effect in April 2015, we are just now starting to see the Board decide cases applying the new rules.

In Danbury Hospital, Case 01-RC-153086, the Regional Director for Region 1 on October 16, 2015, lent his interpretation to one of the new requirements of the quickie election rules, namely the employer’s obligation to provide employees’ personal phone number and personal email address if such data was “available” to the employer.

There, the employer provided the union with all of the personal phone and email addresses it had in its human resources computer system- about 94% of the bargaining unit.  The human resources computer system did not have this data for the other 6% of the bargaining unit.  An election was held where the union was narrowly defeated.  The union filed objections to the election and asking for a re-run election claiming that the employer failed to comply with the new quickie election rules by failing to provide the personal email addresses and phone numbers for the other 6% of the bargaining unit.  At the objections hearing, it was discovered that one of the employer’s supervisors maintained an independent list of email addresses and phone numbers separate from the human resources computer system.

The Regional Director, agreeing with the union, found that because the employer did not supplement the list it collected from its human resources software with the supervisor’s list it failed to comply with the new rules and thus ordered a re-run election.

Based on this case, it is clear that the NLRB is taking a very broad view of the new quickie election rules.  Employers should take steps now to consolidate employees’ personal information prior to union organizing attempts.  If you have any questions about this case, or the Board’s new quickie rules, please feel free to contact us.

The National Labor Relations Board says “Happy Labor Day” with Flurry of Late Summer Pro-Union Moves

Posted in NLRB

While some people may have been on vacation at the end of August, the past few weeks have been extremely busy at the National Labor Relations Board (“NLRB” or “Board”), with a series of decisions that will continue to make it easier for unions to organize non-union employers.

Virtual Organizing Has Arrived! The General Counsel Issues Guidance that Electronic Signatures Are Valid In Representation Cases

On September 1, the General Counsel issued guidance that unions may submit electronic signatures to satisfy a showing of interest in representation cases. No longer will an actual signed union authorization card be necessary, opening the door for virtual organizing, eliminating physical barriers that may previously have prevented union organizers from communicating with employees.
Memorandum GC 15-08 details the requirements for petitions containing electronic signatures to be valid. Such submissions must include:

  1. the signer’s name;
  2. the signer’s email address or other known contact information (e.g., social media account);
  3. the signer’s telephone number;
  4. the language to which the signer has agreed (e.g., that the signer wishes to be represented by said union for purposes of collective bargaining or no longer wishes to be represented by said union for purposes of collective bargaining);
  5. the date the electronic signature was submitted; and,
  6. the name of the employer of the employee.

The General Counsel also requires the party submitting the electronic signature to submit additional information identifying and explaining what technology was used to ensure that the electronic signature is that of the signatory employee, that the employee herself signed the document, and that the electronically transmitted information is the same information seen and signed by the employees.

While the General Counsel notes that its requirements are more stringent that what is required for non-electronic signatures, this is a dramatic shift in how unions can generate the required 30% interest to get a Board election. With virtual organizing, it makes it more likely that an employer will never see the organizing activity (before it’s too late).

Labor Board Rules That An Employer May Not Terminate Dues Deduction Upon Expiration of CBA: Take Two

In a long expected decision, on August 27, the NLRB, in Lincoln Lutheran of Racine, 362 NLRB No. 188, a 3-2 decision, ruled that an employer may not unilaterally cease making dues deductions upon the expiration of a collective bargaining agreement. This decision explicitly overturns Bethlehem Steel, a case which stood for more than 50 years.

If this sounds familiar to you, you are not having déjà vu. The NLRB decided a case in 2012 with the identical holding. However, the 2012 case was vacated as a result of the United States Supreme Court’s decision in Noel Canning. Thus, Bethlehem Steel, while on very shaky footing, was given a three year reprieve…until now.

Employers with collective bargaining agreements should review their agreements to determine whether they have a dues deduction provision. If so, employers should now treat the provision like any other mandatory subject of bargaining and not deviate from the provision even after a contract has expired.

NLRB’s New Successorship Rule Raises the Question of Whether Worker Retention Statutes Are Preempted By Federal Law

Also on August 27, 2015, the National Labor Relations Board decided in GVS Properties, LLC, 29-CA-077359, 362 NLRB No. 194 (Aug. 27, 2015), the issue of when an employer required to hire its predecessors’ employees under a state or local worker retention law becomes a successor (under labor law) and is required to recognize and bargain with the union representing the predecessor’s employees.

The statute at issue in GVS Properties, the New York City Displaced Building Service Workers Protection Act (“DBSWPA”), mandates that a successor employer in the building service industry retain its predecessor’s workers for a 90-day transition period. Many other state and local statues contain similar requirements. Establishing new law, the Board held – in a split decision – that when such a statute requires an employer to hire its predecessor’s employees, the successorship doctrine applies when the employer first hires the workers, not after the mandatory retention period, even though the employment is mandated by law, not by choice.

The Board’s holding substantially limits the ability of building service employers and others subject to worker retention statutes to structure their employment relationships when acquiring a company. The Board’s decision, however, may have even broader implications, as the most significant, unintended consequence may be to call into question the lawfulness of the worker retention statutes themselves. Board Member Johnson predicted in his dissent that the Board’s holding will result in the statutes being preempted by federal law: “Ironically, it could prove the death knell for local worker retention statues. By allowing a local statute to control a matter of federal labor law, the majority paves the way for these statutes to run headlong into the Supremacy Clause of the Constitution.” Member Johnson argued that it is the statutory responsibility of the Board, not local governments, to fashion federal successorship law. Thus, Member Johnson claimed that the Board’s decision in GVS Properties created a “reverse preemption” situation, where “[t]he local tail will be wagging the Federal Supremacy Clause dog.”

Whether Member Johnson’s prediction rings true will be up to the federal courts, where this issue will be decided. The courts have already provided some forecast for what is to come. In an earlier proceeding involving the same employer and facts as in GVS Properties, Judge Cogan of the Southern District of New York stated that based on the Board’s position that a new employer should become a successor before the 90-day retention period expires, “the New York City Council has superseded the Supreme Court on a matter of national labor policy…” Paulsen ex rel. N.L.R.B. v. GVS Properties, LLC, 904 F. Supp. 2d 282, 291-92 (E.D.N.Y. 2012). While the D.C.. Circuit has suggested in a prior case (Washington Serv. Contractors Coalition v. District of Columbia, 54 F.3d 811 (D.C. Cir. 1995) that the Board’s new position may be valid, much more recently two other circuit courts rejected challenges to worker retention statutes on preemption grounds but only because they assumed that successorship would not apply until after the mandatory retention periods. Rhode Island Hospitality, 667 F.3d 17 (1st Cir. 2011) and California Grocers Assn. v. City of Los Angeles, 52 Cal. 4th 177 (2011). With this type of split already existing, we may see this issue before the Supreme Court in short order.

And Don’t Forget…

The Board’s recent decision greatly expanding the scope of the reach of its joint employer test in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015). This departure from its long-standing joint employer standard, which we summarized last week, will have the Board applying a much broader standard in assessing whether a joint employer relationship exists. http://www.laborrelationsupdate.com/nlrb/too-close-for-comfort-nlrb-departs-from-long-standing-joint-employer-standard/.

The flurry of pro-union activity by the Board has given employers a lot to digest. Stay tuned for additional updates, and we’re available to work through any questions you may have.

Too Close for Comfort? NLRB Departs from Long Standing Joint Employer Standard

Posted in Employer policies, NLRB

Citing “changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships,” in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015), a 3-2 National Labor Relations Board majority (Pearce, Hirozawa, McFerran) significantly revised and broadened the standard for assessing joint-employer status under the National Labor Relations Act. The primary justification for the Board’s sweeping departure from the current standard was that it did not “best serve the Act’s policies of encouraging the practice and procedure of collective bargaining,” considering the expansion of workplace arrangements including a diversity of subcontracting and contingent employment relationships since the 1990s.  Click here to read more.

DC Circuit: NLRB Acting General Counsel Solomon’s Tenure Violated Vacancy Statute, Unfair Labor Practice Complaint Unauthorized

Posted in NLRA, NLRB, Recess appointments, Uncategorized

The political gridlock in Washington DC caused several years of tumult at the NLRB, spawning two Supreme Court decisions (Noel Canning and New Process Steel) and several courts of appeals decisions regarding the Board’s ability to act without regular appointments, and resulted in scores of decisions having to be reconsidered by a newly constituted Board.  Most of the litigation during the last few years involved whether the Board had the requisite quorum it needed to act.  While the Board quorum received most of the attention, there also exists an entire line of arguments attacking the authority of perpetual Acting General Counsel Lafe Solomon to act during his brief tenure.  Of course, regardless of the type of claim, the business of the NLRB ground on despite these substantial issues being raised with little thought to the consequences.

In Southwest Ambulance v. NLRB, Case No. 14-1107 (DC Cir. August 7, 2015), the DC Circuit Court of Appeals held that the Acting General Counsel’s appointment violated the Federal Vacancies Reform Act (“FVRA”), which meant that during the period of violation the NLRB (as in all Regions) was without authority to issue a complaint for a 23 month period.  In Southwest Ambulance, the Court was presented with an allegation that the employer made a unilateral change to a term or condition of employment upon expiration of a collective bargaining agreement in violation of the NLRA.  After a hearing, the Administrative Law Judge concluded a violation occurred.  In its exceptions, the employer challenged the complaint on the grounds that Solomon did not have authority to issue a complaint because his appointment was in violation of the FVRA.  This argument was rejected by the NLRB, which upheld the unfair labor practice on appeal.  The employer appealed to the DC Circuit and the appeals court refused to enforce the NLRB’s order finding the complaint was issued without proper authority.

In addressing whether the FVRA was properly followed, the Court noted that the FVRA sets limits on who can serve pursuant to the statute:   “a person may not serve as an acting officer for an office under this section if, (a) during the 365-day period preceding the date of the death, resignation, or beginning of inability to serve, such person (i) did not serve in the position of first assistant to the office of such officer; or (ii) served in the position to the office of such officer for less than 90 days; and (B) the President submits a nomination of such person to the Senate for appointment to such office.”

The Court reviewed the timeline of events.  In June 2010, Ronald Meisburg resigned as NLRB General Counsel.  The President, citing the FVRA, directed Soloman who was then the Director of the NLRB’s Office of Representation Appeals, to serve as Acting General Counsel.  On January 5, 2011, the President submitted Solomon’s nomination to the Senate.  Ultimately, Solomon was re-nominated and that nomination was withdrawn in 2013.  Current General Counsel Richard Griffin’s nomination was submitted instead.

The Court held that Solomon’s appointment under the FVRA was in violation as of January 2011 when the President submitted his nomination to the Senate.  As a consequence, the Court held that under Section 3348(e)(1) of the FVRA, any action taken in violation of the statute was void.  Specifically, that provision reads in part:  “[a]n action taken by any person who is not acting [in compliance with the FVRA] shall have no force or effect” and “may not be subsequently ratified.”

The Court ruled that since the complaint issued against the employer was void and not subject to ratification, the NLRB’s consideration of the case on appeal (by a properly constituted Board) did not save the case.  The court stressed the narrow nature of its ruling:

[W]e emphasize the narrowness of our decision.  We hold that former Acting General Counsel of the NLRB, Lafe Solomon, served in violation of the FVRA from January 5, 2011 to November 4, 2013.  But this case is not Son of Noel Canning and we do not expect it to retroactively undermine a host of NLRB decisions.  We address the FVRA objection in this case because petitioner raised the issue in its exceptions to the ALJ decision as a defense to an ongoing enforcement proceeding.  We doubt that an employer that failed to timely raise an FVRA objection–regardless of whether proceedings are ongoing or concluded–will enjoy the same success.

Thus, while there are many cases in the NLRB process challenging Solomon’s ability to act during his tenure, there likely are only a few that raised this specific attack in a timely fashion:  that Solomon’s actions were in violation of the FVRA.  Still, it is hard to imagine how, if the FVRA explicitly states that all actions taken in violation of the statute are void and not subject to ratification, this argument could not be raised at any time.  Solomon took many actions during the 23 month period at issue, including appointing Regional Directors, issuing complaints, seeking injunctive relief, all of which could be considered void and not subject to ratification.